Coconut oil is the most popular feedstock for biodiesel in the Philippines which is sold in the market in the form of CME (coco-methyl ester).
Adding CME to standard diesel fuel results to better combustion, less pollution and more engine power. Engines using biodiesel run smoothly and have longer maintenance intervals.
Given these advantages and much concern on the sustainability of the environment, the Philippine government passed the Biofuels Act of 2006. The said law mandates the blending of biofuels such as CME with the standard fuels available in the Philippine market.Market Opportunity Increasing Demand
- Biofuels Act of 2006 - created a market for biodiesel through the required blend of the product with the standard diesel oil
|Blend||Year||Diesel Demand* (Million liters)||Biodiesel Requirement (Million liters)|
|*based on DOE Demand Estimates for Diesel (2007-2014 Philippine Energy Plan)|
- market opportunity: exports
- further increase in blend from 2% to 5% will spur demand for CME
- 68 out of 79 provinces are coconut areas covering 1,195 municipalities
- about 331 million coconut trees planted in about 3.3 million hectares of land
- 2010 coconut production: 15.54 million MT
- sustained supply of coconut oil
- total coconut production per year: 75% for export, 25% for domestic consumption
- less than 5% of the 25% is for CME production (or 65,000-70,000 MT)
- contract-growing scheme - farmers enter into arrangements with processors or manufacturers